Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1887-03-11
FRIDAY. MARCH II, 1887
Pooling-A Remarkable Prediction.

In speaking Of the recent reported
and effected ideals in railroad stocks,
or rather in railroads, the Atlanta Con-
stitption says
zone thing is certain. Under the
interstate commerce bill, which for
bids railroads to pool their business, the
railroads themselves viii be pooled. II
they cannot make traffic arrangements
which prevent ruinous competition, they
will evade the prohibitory law by com
bining their stocks in a common trea-
sury and running under one manage
ment.
That paragraph reminded us at once
of a speech made in the United States
Senate in February last on the inter
State commerce bill by Governor
BRowy, of Georgia, who is one of the
most thoroughly practical railroad-men
in the United States, as well as one Of
the shrewdest of businessmen, and
withsl a fine lawyer Governor Brown
said
The object of the authors of this pro-
vision (forbidding poolingl, presume,
is to turn loose all the railroads III
fierce competition with each other,
with view Of getting freights down at
lower rate. In that the friends OF
the bill will be greatly mistaken.
Pooling prevents consolidation and
monopoly. Unbridled competition
produces absolute consolidation and
monopoly, and in railroading there is
no escape from it. You may ask me
how it produces this result. Expe-
rience answers. Say there are three
competing lines between two given
points or cities If these lines carry at
reasonable rates and pool the business,
the rates will be steady and uniform.
If they are not permitted to pool, and
are thrown loose for unbridled compe-
tition, they will soon run to the point
where the weakest one of the three
will be unable to sustain itself, and, not
being able TO meet its engagements, il
Will go into the hands of a receiver,
and will finally be sold under the mar
shal's hammer, and is likely to be pur-
chased by the strongest of the three.
Then, as unbridled competition RACES
between the two remaining companies,
the stronger finally predominates over
the weaker, and the weaker one breaks
down and goes through the same pro-
cess of liquidation, and is disposed of
under the marshal's hammer and bought
in by the stronger competitor. The
three are then placed under one man
agomcnt, that management applying
alike to all three Of them, and there is
no more war of rates, There is no
more need Of a pool the very fact
that one of the companies now owns
tie railroads formerly owned by three
companies dispenses with the necessity
for pool and at once puts period to
all competitor, and the three lines run
in perfect harmony. The TcsuV, there
.IOlc, Of dcayi.g 10 he rcilr0gdS The
right 10 poet Hcir frCjghts is tie con-
SOiiGatiOH o. al the lines Of each see
fion ri the country uHdcr one manage
mcnt, UAieh IS an absolute monopoly
q tic business Of tic section.
lie southern railroad companies can
not maintain themselves if they must
go into perpetual war OF rate-cutting.
Experience having taught them this,
they have formed an ASSOCIATION known
as the Southern Railway and Steamship
Association, which embraces the terri |
tory from the Dotomac to The Missis-
sippi rivcr, and from the Atlantic and |
the Gulf 10 the Ohio river including /
the steamships doing the coastwise !
trade between the southern and eastern |
cities. Since the pool has been estab- /
lisbod rates have gone steadily down.
They have been generally maintained,
and the companies have been enabled |
to set along by uniformity aud maiute-
nance Of rates, and they have given the
section Of country covered by them |
good railroad service. Pass your bill |
DENYING to them the right to pool their
business, and what will be the result
1t will be consolidation and absolute
monopoly.
There are six leadingcompanics which
now cover and 90 the business of nearly |
all the territory mentioned. What is
known as the Coast Line runs from Nir-
ginia down the coast into Florida the
Richmond and Danville from Washing
ton TO Birmingham, Ala, with branches;
the Central of Georgia, covering the
greater part of that State, and large
part of South Carolina and Alabama
the East Tennessee, Virginia and
Georgia, with some 1000 miles of rail
road, covering the territory from Bris-
tol, ON the line of Virginia and Tennes-
see, to the Mississippi river, and a line
Though Georgia from Chattanooga to
Brunswick the Queen and Crescent
Line from Cincinnati, Ohio, to New Or
leans. with branches the Louisville
and Nashville. from ST. Louis, No,
covering a good part of Kentucky and
Tenne ssee, and down through Alabama
into Florida.
have not the figures before me, but
taking the Central as an illustration,
and II is one OF the largest combinations
Of the six ; and its capital stock is, in
round numbers, $500, 000 The pur-
chase Of little over three and three
quarter millions Of dollars gives the
party purchasing control of the entire
line and It's branches.
The stock of some Of tho other com.
binaiions Is long way below par, and
pre- sumo might safely say That five
millions Of dollars each would buy
controlling interest in the stock of each
company. So that thirty millions OF
dollars in round numbers would pur-
chase the controlling interest in the
stock OF the six companies covering the
whole territory above mentioned, or a
little larger sum would buy them under
the inarshal's hammer, One single man
in the State Of New York is able 10 pay
thirty millions for the stock, and con
troll the whole OF this vast combination,
including the lines with all their
branches, which would leave but few
short railroads in all that vast territory
which would not be embraced in the i
purchase. And this would end the ne
cessity ofpooling. Say, orinstance, taat
Jay Gould becomes the purchaser OF
the controlling interest Ia the six great
companies. What is the result? No 1
pooling Is necessary from the Potomac
to the mississippi and from the coast
10 the Ohio, AS one man controls the
railroads in the whole territory there
would be perfect harmony in the man |